India's Personal Data Protection (PDP) Bill

India's Personal Data Protection (PDP) Bill

Understanding Concerns of Stakeholders

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Accepting submissions till 13 Sep 2021, 09:15 AM

India’s Personal Data Protection (PDP) Bill has been in the news for multiple reasons. This includes tech giants such as Whatsapp unwilling to implement data protection policies until the Bill was passed in mid July 1. In addition to this with the passage of the IT Rules, 2021 debates regarding Indian governance over data, through shifts in encryption policies were also heavily reported on 2. One can also view Hasgeek’s ongoing research on the IT Rules, 2021 for further understanding of the complexity it poses to Indian’s today.

On 8 July, members of the JPC were elevated to ministerial positions, leaving the future of data protection regulation in India uncertain. Hence, there were concerns about the passage of PDP Bill without consultation with other members of the Joint Parliamentary Committee (JPC). Postponing the submission of the JPC report post the reconstitution of it’s members till the winter session in November 2021 3.

Thus, the 2019 version is the latest draft of the PDP Bill that one can access and is the main frame of reference for our critique. The text of the Bill can be viewed at http://164.100.47.4/BillsTexts/LSBillTexts/Asintroduced/373_2019_LS_Eng.pdf

Peer review and feedback for the PDP Bill: Privacy Mode programme took the opportunity to submit a peer reviewed set of recommendations for the 2019 draft PDP Bill between 10 and 14 September. The peer reviewed recommendations document has been shared with:

  1. B N Mohapatra of the Joint Parliamentary Committee (JPC) Secretariat.
  2. P P Chaudhary, JPC Chairperson.
  3. Ashwani Vaishnaw of MEITY.
  4. Rajeev Chandrasekar of MEITY.
  5. Piyush Goyal of the Department for Promotion of Industry and Internal Trade (DPIIT).
  6. ~30 representatives from Lok Sabha and Rajya Sabha.

Privacy Mode’s and Hasgeek’s vision is to foster peer review in the practice of technology. Solutions and problem solving approaches - those involving technology - need to be critiqued and discussed in public. The end goal is not a perfect solution. Discussing and acknowledging the pros and cons of different approaches - and putting it out there that vulnerabilities exist and must be watched - makes for sound technology (and policy) implementation.

Since 2010, Hasgeek has created platforms for practitioners to share case studies of technology (and subsequently legal and policy) implementations in the domains of data, large-scale infrastructure, Cloud infrastructure and systems engineering, security and most recently, data privacy. Tech practitioners - across a wide variety of companies and sectors - share their work at conferences and forums that Hasgeek organizes. Presenters are vetted through a process of peer review and feedback. Participants benchmark their organization’s practices against what their peers from the industry share at these platforms. A safe and welcoming environment is created to collectively introspect on emerging business, economic and societal challenges where technology has a role to play.

In the spirit of peer review, Hasgeek worked with the technology and startup ecosystems, especially between 2020 and 2021, to understand their views and concerns about privacy and data security. This submission to the JPC is consolidated from the concerns and recommendations voiced at the following forums:

  1. Research on Non-Personal Data (NPD) with 50 representatives from engineering and product teams in startups, and with VCs and founders: The research and outreach are published at: https://hasgeek.com/PrivacyMode/non-personal-data/

  2. Research conducted with practitioners from the tech industry between April and November 2020 on the state of privacy-tech and readiness to implement data protection in India: https://hasgeek.com/PrivacyMode/privacy-in-indian-tech-2020/ with participants from PayTech, Fintech, SaaS, social networking, and health tech.

  3. India’s first Data Privacy Product and Engineering Conference organized in April 2021 brought practitioners from Fintech, Consumer Tech and SaaS companies to share experiential case studies about technology approaches and organizational processes for doing compliance, data security and privacy: https://hasgeek.com/rootconf/data-privacy-conference/videos.

The purpose of this submission is three-fold:

  1. To present the concerns of tech practitioners from small4, medium and large businesses with the PDP Bill, and what they foresee as significant compliance challenges.
  2. To request the JPC to carry out public consultations with software architects, product teams and legal teams from small, medium and large-sized organizations about potential technical challenges in implementing the PDP Bill.
  3. To incorporate the spirit of peer review in the policy-making process, where practitioners can offer feedback on the ‘technique’ and technicalities of implementation, and safeguards that have to be put in place to ensure true data protection.

In this submission, we have highlighted the following concerns that small and medium enterprises have with regards to the PDP Bill:

  1. Ambiguous definitions.
  2. Data localization and international policy.
  3. Costs of compliance.
  4. Power of the Data Protection Authority (DPA) over Data Fiduciaries.
  5. Governance of Non-Personal Data (NPD).

The key concerns and recommendations have been expanded in the following sections. Scroll down to read.

About the authors

- Bhavani Seetharaman is a Research Associate at Hasgeek. She has previously worked for the Centre for Budget and Policy Studies (CBPS), Microsoft Research India, and the University of Michigan, Ann Arbor.
- Nadika Nadja is a researcher (https://hasgeek.com/nadikanadja) at Hasgeek. She has worked across advertising, journalism, TV & film production as a writer, editor and researcher.

Acknowledgements

We thank the following individuals for reviewing this submission and for providing valuable inputs during its drafting.

  1. Suman Kar, founder of security firm Banbreach, for participating in writing the early drafts of this submission. Suman’s work on data security includes analysis of predatory loan apps and impact on consumers - https://hasgeek.com/cashlessconsumer/killerloanapps-detecting-fake-fintech-apps/
  2. Rajiv Onat, Senior Leader working on Data Platforms, for reviewing key concerns and adding nuance on operational aspects of compliance.
  3. Yagnik Khanna, independent software architect and curator at Rootconf, for reviewing key concerns and adding nuance to compliance requirements from engineering and inclusion perspectives.
  4. Sathish KS, Senior Engineering Leader, for reviewing key concerns and adding nuance on operational aspects of compliance. Sathish has also shared perspectives and concerns about the costs of compliance and impact on engineering processes under the proposed NPD framework at https://hasgeek.com/PrivacyMode/impact-of-non-personal-data-npd-framework-on-engineering-processes/videos

Contact details

If you have comments and inquiries, post them at https://hasgeek.com/PrivacyMode/pdp-bill/comments. Follow #PrivacyMode on Twitter


  1. WhatsApp and the wait for Data Protection Bill - https://www.thehindubusinessline.com/business-laws/whatsapp-and-the-wait-for-data-protection-bill/article35266846.ece 

  2. The Encryption Debate in India: 2021 Update- https://carnegieendowment.org/2021/03/31/encryption-debate-in-india-2021-update-pub-84215 

  3. JPC gets time to present report on personal data protection bill - https://www.livemint.com/news/india/jpc-to-seek-time-to-present-report-on-personal-data-protection-bill-11627017273374.html 

  4. MSME defines small, medium and micro enterprises based on investments and turnover amounts https://msme.gov.in/know-about-msme. In this submission, based on recommendations by the reviewers, we have defined small, medium and micro enterprises based on the number of employees and the community the enterprise is working for. If the product is extremely niche and focuses on very small consumer groups, then the compliance with regards to data protection as well as the definition of Significant Data Fiduciary (SDF) must be carefully looked into. 

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Bhavani Seetharaman

Bhavani Seetharaman

@Bhavani-21

Costs of compliance

Submitted Sep 12, 2021

Expensive Hiring Requirements (Clause 30)

Clause 30 in the draft PDP 2019 Bill requires hiring a Data Protection Officer (DPO) for implementing grievance redressal mechanisms and for accountability during inquiries in case of non-compliance. There is no clarity about whether such a role can be outsourced to third parties who specialize in such compliance requirements. The European General Data Protection Rules (GDPR)1 has clear specifications about the DPO’s hiring, including no short-term or fixed term contract for the role. GDPR2 also specifies that organizations which have large-scale data processing or those which handle sensitive data must hire a DPO. Such specifications should be made clear in the PDP Bill too.

During Privacy Mode’s study on “Privacy Practices in the Indian tech ecosystem” 3 and during discussions at the Data Privacy Conference, representatives from the tech community felt that hiring specialized personnel such as legal and compliance teams, Chief Data Officer (CDO), Privacy Officer, etc is not only a matter of budgets. Such hiring also needs dedicated time and efforts on the part of the top management and leadership. Small and mid-sized organizations deal with this issue by assigning privacy and compliance roles to existing mid- and senior executives. These executives assume compliance roles in addition to handling other responsibilities, resulting in decision-making being split between implementing for privacy versus managing operational exigencies. For a smaller organization, especially a startup that is tapping an unexplored product market, product decisions are influenced more by go-to-market factors rather than by implementing privacy-respecting features. In such cases, Compliance Officers have no veto power on product decisions. In the “Privacy Practices in the tech ecosystem” research4, organizations across different sizes said they were either unaware of the CDO’s or the Compliance officer’s veto powers, or that the officer can veto product decisions when there are real data privacy concerns. Of the large organizations surveyed, only 52% respondents said that Compliance Officers can veto product decisions. Undoubtedly, operational imperatives win.

Expensive documentation (Clauses 24, 28, 36)

Clause 24 highlights that an integral process of data protection under PDP requires periodic reports to be submitted. Again, there is a lack of information regarding the intervals at which companies have to submit these reports. Clause 28 requires that periodic reports be sent to the DPA. This clause does not expand on the duration of the periodic intervals. Similarly, it is not clear what constitutes the correct format for such reports. Irrespective of ambiguity, it is also important to take into account that producing reports is a time-consuming process for businesses, especially if they have to either hire staff or invest in automating report generating capabilities. In addition to this, Clause 36 states that data protection will not be enforced with regards to legal cases of clients. Currently, there are over 4.4 crore pending cases in the country5. With such a precedent being allowed in terms of pure compliance, Data Fiduciaries (DF) cannot predict the mountain of data they may need to publish for such cases.

Expensive adjudicating processes (Clauses 32, 36, 53)

Clause 32 explains the grievance redressal mechanisms that DFs have to implement, and provides adequate resources for Data Principals to protect their data. However, there is no clarity on the processes that have to be implemented to enforce redressal mechanisms. This creates vagueness for stakeholders. A time frame of 30 days has been set for addressing grievances. But this time frame may not be adequate for stakeholders to adequately address grievances, likely leading to litigation. Organizations that do not have adequate manpower to address these concerns will be overburdened. A respondent in the discussion about the future of PDP in India at the Data Privacy Conference explained that startups don’t look at the problem of data governance from day one:

“For many startups, to think about compliance is like taking away 50% of their engineering bandwidth. Data governance as a concept in itself is a massive engineering, product and operational effort.”

Small and medium organizations do not have the organization structures or capabilities to set up specialized departments to handle risk and compliance. This, combined with their lack of training budgets for privacy and lack of standardized procedures to handle privacy concerns and risk, is a point of great concern that will have implications across the tech ecosystem. GDPR doesn’t define a specific time frame for responding to complaints 6. Instead, the law has a time range for handling grievances and complaints. GDPR also goes into details to explain what can be considered grievances7 under the law and mentions the period within which the Data Controller must issue petitions to the DPA. An additional complication in the draft PDP Bill is in Clause 36 which enforces that personal data protections are not subject to legal cases. This can lead to organizations being embroiled in more litigation.

Finally, Clause 53 focuses on the inquiry process when the DPA adjudicates that an organization has not complied with the PDP legislation. Since the DPA is the final authority for compliance, as mentioned in Clause 24, complexities will arise if the DPA also has the sole discretion to determine non-compliance too. The inquiry process not only holds everyone who works with the DPO accountable as part of the enquiry process; contractors will also be made party to these disputes and inquiry processes if they provided services to the DPO’s office. Given the risks of litigation, consultants and third-parties may either be disinclined to provide services or they may increase the costs of their services to include estimates of participating in the inquiry processes. This may require businesses to mass hire for compliance which they may not be able to afford (and the fact that the skill sets for such hiring may not even exist in the market in the initial years of compliance).

Penalization (Clauses 58 to 61)

Clauses 58 to 61 highlight the financial costs of non-compliance, and explain the range of financial penalties for non-compliance for DFs. There are different ranges for DFs and SDFs. Here, the risk is that if the DPA classifies a small business as an SDF, the penalty amounts will increase, and add to the costs of operations for small businesses. Many small businesses may not be able to survive in the current climate.

We recommend that the above Clauses provide more clarity on the exact processes and nuances for personal data processing. Terminologies such as public interest need to be specified with adequate examples. Similarly, periodic intervals must be specified and must take into account the size of the organization, manpower and investment for such implementation.

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Make a submission

Accepting submissions till 13 Sep 2021, 09:15 AM

Hosted by

Deep dives into privacy and security, and understanding needs of the Indian tech ecosystem through guides, research, collaboration, events and conferences. Sponsors: Privacy Mode’s programmes are sponsored by: more

Supported by

Omidyar Network India invests in bold entrepreneurs who help create a meaningful life for every Indian, especially the hundreds of millions of Indians in low-income and lower-middle-income populations, ranging from the poorest among us to the existing middle class. To drive empowerment and social i… more
We’re the world’s most comprehensive and broadly adopted cloud platform, offering over 200 fully featured services from data centers globally. As a hyperscale cloud service provider, AWS provides access to highly advanced computing tools on rent for startups and SMEs at affordable prices. We help t… more
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